

The US Dollar is On Track For Its Worst Year in Modern History (semafor.com) 149
The US dollar is on track for its worst year in modern history and may not be done falling yet. The greenback is down more than 7% this year and Morgan Stanley predicts it could fall another 10%. Semafor: A weaker dollar could make US exports more competitive, boosting Trump's plan to rebalance US trade, but makes imports more expensive, adding to the sting of tariffs.
The question ahead is whether the dollar doesn't just lose its value, but its role at the center of the global financial system. So far, there are few alternatives. And efforts to de-dollarize -- central banks shifting into gold, China shoveling its currency into developing nations through swap lines -- haven't meaningfully shifted the picture.
The question ahead is whether the dollar doesn't just lose its value, but its role at the center of the global financial system. So far, there are few alternatives. And efforts to de-dollarize -- central banks shifting into gold, China shoveling its currency into developing nations through swap lines -- haven't meaningfully shifted the picture.
Time to resurrect the old meme... (Score:3)
And efforts to de-dollarize -- central banks shifting into gold, China shoveling its currency into developing nations through swap lines -- haven't meaningfully shifted the picture...YET.
Fixed that for you!
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Re:Time to resurrect the old meme... (Score:4, Insightful)
Carrier strike groups require a lot of stuff that must be bought with dollars.
At some point in time that isn't too far in the future, the stuff that the dollar buys will not be enough to support both carrier strike groups and the billionaire class.
We will see if the military "AI" can compensate the loss of maintenance due to the decline of dollar value.
I will not delve in minor detail like the relevance of the carrier strike groups or the lack of alliances, which the Trumpistan gladly destroyed.
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I get the impression the US military is already less effective than many believe. Nothing quite as drastic as when Putin ordered to roll the tanks and the armor turned out to be egg cartons. But corruption has definitely been sucking something out. And there's no denying the manpower shortage as well.
At one time I thought about joining the military. I'm also in favor of some level of compulsory service. But that's all contingent on sticking to the mission, that oath they take. For anyone considering enlisti
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What does that even mean? Keep using the dollar or you'll get bombed (and warned early by the drunken defense sec?)
Re: Time to resurrect the old meme... (Score:2)
Well, yes. It's not coincidence that Qadaffi was trying to bring about a Pan-African currency or that Iraq was selling oil in non-US currencies.
Re:Time to resurrect the old meme... (Score:5, Informative)
Just to add some insight:
Trump, in a Truth Social post, said: “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.”
https://apnews.com/article/tru... [apnews.com]
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they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful
I wish he would get a bigger vocabulary.
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The way the Idiot King is pissing countries off, it might not be long before the whole world realigns its trade to leave the US mostly out in the cold. That would be a huge win for Putin, of course, so Trump would be fine with that.
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Re: Time to resurrect the old meme... (Score:2)
Truth is : Petro-Dollars.
Price for barrels of oil traded in $US. I read that the real reason for the gulf war wasnâ(TM)t WoMD but rather that Iraq was threatening to trade in Petroleum-Euros instead. Might even be true.
Now, if BRICS or another consortium of countries start trading in another currency, the $US-peso will crash.
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Just to add some insight:
Trump, in a Truth Social post, said: “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.”
https://apnews.com/article/tru... [apnews.com]
So clueless.
The fact is that the trade imbalance is the largest single factor that makes the US dollar the world currency -- and also helps to keep the federal debt cheap. All of those countries that have a trade surplus with us send us lots of goods and in exchange they get lots of dollars. What do they do with them? They buy US-denominated securities, including treasury bonds. So many people and organizations around the world holding large reserves of US-denominated securities is what makes the doll
Funny you mention Gold (Score:2)
Some $245bn worth is circulating the news right now https://www.financialexpress.c... [financialexpress.com]
Deficit spending causes inflation (Score:5, Interesting)
Re:Deficit spending causes inflation (Score:5, Interesting)
This is why many conservatives objected to the BBB, as it continued and expanded deficit spending.
Which conservatives objected to the BBB, and didn't end up voting for it?
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I think he'll be fine. He could lose 99.9% overnight and still be better of than the rest of the country.
Re:Deficit spending causes inflation (Score:5, Insightful)
Elon Musk is not a conservative. Nor a liberal. He's whatever he needs to be at any given moment.
When federal money was raining on his brand new telsa factory he was all for left-leaning, social governement. And all conservatives hated him, and liberals loved him. But when said governements started annoying him about things like, you know, safety regulations, worker's conditions, etc, then he turned all anti-governement, pro-business, "I'm-going-to-move-everything-to-Texas" right-wing conservative. And sudenly, all conservatives started loving him and liberals started burning teslas.
Trump is the same. He was a card carrying democrat for more than four decades and a good friend of the Clintons... Until he decided to run for president, when he instantly switched to conservative for logistical reasons. And now conservatives think he's the second coming of Christ (literaly).
Musk and Trump are opportunistic sociopaths. They are whatever the fuck they need to be at any given time to court whatever part of the population they need to court in order to accomplish their goals.
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Elon Musk is not a conservative. Nor a liberal. He's whatever he needs to be at any given moment.
While I think there is some truth to this, I read a compelling case for why he has gone to the Trump side of things. One of Elon's children from his first marriage is now a trans woman and it seems that Elon has sort of gone bat shit crazy in terms of dealing with this. Instead of trying to find some way to accept this, he went to Trump simply because he knew Trump would bash trans people (doing so was a very effective part of his 2024 TV advertising). I think it may honestly be that simple.
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You think if Elon thought different he would have voted for it? Do you know how congress works? Even the world's richest man can't simply go in and vote for it.
The GP postulated a scenario where people who could vote didn't. Elon Musk can't vote.
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Elon is reacting because he's finally realized Trump is a grifter and anyone who befriends him ends up broke and decrepit.
See what happened to his biggest supporters from his first term - like Rudy Giuliani, or even the My Pillow guy Mike Lindell. His biggest supporters, but after they stopped being useful to Trump, Trump ditched them to fight their own wars.
Elon was useful to Trump, and now that he's stopped being so useful Trump is threatening to cut him off like he's cut off all previously-useful people.
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Why are we talking about House races in 2022, also did you read the article? They explain why, you just don't think it was a good strategy, I don't disagree. I don't expect you to read my posts but I am quite critical of how the DNC strategizes. That does not forgive 1 single fucking iota of what Trump, Republicans and Musk have brought to us.
I want to see a balanced budget and the dept to go down.
Why and what does a "balanced budget" look like? Justify that statement. Also what dept are you even talking about? Do better trolling.
So he threatened the primary (Score:2)
Mark my words in a few months as a rider on a bill he will get his subsidies back long enough for him to extract all the money from Tesla with that pay package of his. He needs just a little bit more time because he's finishing up the paperwork after buying a law in Delaware that will let him avoid the laws
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I hate to say this outloud, but my respect for Rand Paul went up a little bit.
I, personally (no knock against anyone else for feeling differently), don't respect him anymore than I did before, but I do acknowledge when politicians that I don't hold in high regard (for lack of less family-friendly terms to use) actually do the right thing, because I do respect that in someone, even if I don't respect anything else they've done or represent otherwise.
For example, I still don't think Mike Pence is a particularly good person in general (he jumped onto the Trump train, and was a willing p
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He doesn't respect science because he set up his own Ophthalmology board in Kentucky because he could not pass a real Ophthalmology board test. He has never had any respect for science....or reason for that matter.
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Rand Paul
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The Republicans do this every time they do something really horrific to americans. The wider the margin they have in Congress the more horrific the thing we get.
They know that the bill is insanely unpopular. Every forum I go
The ones in competitive States or districts (Score:2)
In other words the ones that could conveniently and politically be allowed to vote against the bill for show.
The bigger the margin you give the right wing extremists the more shit they can do to you to hurt you because the more of those vulnerable senators can vote for nasty shit. Same with the House of Representatives.
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Re: Deficit spending causes inflation (Score:2)
How come the stock market outperforms inflation and keeps setting new record highs? How are you going to buy the S&P 500 if you don't hold dollars?
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Re: Deficit spending causes inflation (Score:2)
Does it matter if the dollar depreciates 10% if your dollar assets appreciate 20%?
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401k's for one reason. The other main one is the delta between official and practical inflation.
That is categorically wrong (Score:2)
The stuff that we loan ourselves is just money supply. There's no issues with it as long as you're not giving it all to the 1%.
The reason you're seeing inflation is your taking all that borrowed money and giving it to about 2,000 americans. They are then using all of the money you gave them to buy up their competitors and jack up prices. That's your inflation.
As for the 7 trillion
Re:Deficit spending causes inflation (Score:4, Insightful)
The BBB was supported by the overwhelming majority of conservatives. That's why the Republicans passed it. One or two billionaires bitching about it doesn't change that.
The Republicans don't, and never have, cared about deficit spending. It was Saint Reagan who actually started the modern trend of overspending. Literally the only time they bring it up is when there's a democrat in office and they want to shoot down any spending that might alleviate poverty. Meanwhile, historically, Democrats have done better controlling the debt than Republicans.
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Objected, complained, stamped their feet, threatened...and then meekly voted for it anyway, because they were too chickenshit fearful of a MAGA backlash. This is largely the same crowd, mind you, that passed another deficit-buster in 2017, but merrily cried foul - even shutting down the government a few times - anytime a Democrat was in the White House.
That's real principled leadership, real profiles of c
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Austerity is not needed to correct any of those things. If we want to give the customer power we should give it to them, making them have less money doesn't do that. Your plan to get more Linux adoption is to just make everyone poorer?
Once again I am here to say thank you to DOGE for showing us all the wonders of government efficiency. For so long, my entire life really, conservatives have gotten away with this axiom that the government wastes money, that's its some black hole where money disappears and
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They can't prove it, they spend billions trying to prove it and came away with really nothing beyond more "I don't agree with this" politics, no fraud, no abuse, no real waste.
Oh But Elon and Trump did a great job of convincing the low information citizen that fraud was rampant. Elon sitting in a round table with the Trump's cabinet was going on and on about toddlers getting $100K SBA loans and millions of people over 140 collecting Social Security. Pam Bondi acknowledging all the fraud and claim she is going after it. End of story. No follow up. This is what the MAGA saw on Fox News, and they think it was the truth, Praise the Orange Jesus.
I don't think there was a single crimin
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Exactly, they made a big stink over USAID which was purely political in nature to cut, made some other political cuts and called it victory and the conservative media machine picks up the message and runs with it.
They also had 4 decades of "the government wastes money" drilled into their brains by Republicans, AM talk radio, and conservative mainstream media. Again, when you read things anywhere you see people say that all the time and it's just expected to be true without justification.
Anytime someone men
Lake Wobegon exchange rates (Score:3)
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I'm curious. I've heard this before. How exactly do they do this? What's the mechanism?
Thing is, there must be a cost to this. If they subsidize exports, that must mean they're penalizing imports and that's reducing the standard of living of Chinese citizens.
No! (Score:5, Funny)
Why would Obama allow this to happen!
Re:No! (Score:5, Funny)
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It must be the fault of some random trans person!
It can't be, we defeated the Woke Mind Virus. Elon Musk even twote it.
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Better of the two Funny comments, but the story is such a rich target...
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Even USAs own rating agencies ... (Score:3)
... are having a hard time justifying their favorable ratings. With one the US has moved from AAA to AA a few years back and even that was seen as being nice and kind. I hope the US doesn't squander trust beyond the Trump era, lest you guys be sitting on a pile of money that the world has finally noticed not being worth the paper it's printed on.
It is my opinion that you could have a true revolution, a bottom-up redo of the US constitution and fixes for the most glaring broken parts of the US system up and running within months without even a single bullet fired. AFAICT from across the pond basically _everyone_ agrees that the current state of things has become untenable. You don't need to be a bunch of Trumpists storming the Capitol to see this.
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It is my opinion that you could have a true revolution, a bottom-up redo of the US constitution and fixes for the most glaring broken parts of the US system up and running within months without even a single bullet fired. AFAICT from across the pond basically _everyone_ agrees that the current state of things has become untenable. You don't need to be a bunch of Trumpists storming the Capitol to see this.
It's being worked on. Clarence Thomas would fast track this https://en.wikipedia.org/wiki/... [wikipedia.org]
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Clarence Thomas would fast track the road to Hell if he thought he could make buck out it.
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What kind of asshole tries to "both sides" the political violence in the United States? It's overwhelmingly coming from the far right. I bet you spend a lot of time comparing mountains to molehills.
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People who can't admit the party they voted for is fucking up. The real shocker is they're doing exactly what they promised and people are flabbergasted. I thought he would only deport criminals, not the guy doing prep work at my favorite restaurant!
The US "dollar" worst in modern history? (Score:2)
How about the US, period?
shame (Score:2)
the lower USD, isn't preventing Americans from traveling abroad, but is is preventing them from identifiying as American and pretending to be from Canada, as show in the first few seconds of this youtube video: https://www.youtube.com/watch?... [youtube.com]
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That's been a thing since Iraq in 2003.
It's always bad news with the dollar (Score:5, Interesting)
I live in Canada. Every time you hear news about the dollar, it's bad news, whether it goes up or down. If it goes up the news reporters go and interview exporters who complain that this hurts their business, and when it goes down the reporters interview importers who explain how this is going to make all the products we buy more expensive. It's honestly very tiring. I mostly just ignore stories like this.
If a currency is functioning normally (not being manipulated) then it works to automatically balance trade. If Americans start buying more and more from overseas, then supply and demand in the currency market will cause the dollar's value to go down, which makes American products and investments more attractive to everyone else. You just have to understand that the US buys a lot of cheap products from overseas, but mostly exports expensive high end products like aircraft parts and machinery. People around the world really like investing in US companies (and even T-bills) because the US market is large, profitable, and safe. Therefore the long term trend has been that Americans import a lot of cheap products in exchange for a lot of investment capital flowing into the US. This kept industry humming, but also had the effect of pushing up housing prices, as a lot of people invest in US real estate.
The dollar has traditionally been so high because the US was considered to be such a safe place to invest. Investors around the world wanted better returns, and foreign governments wanted a safe reserve currency, and for the most part the US government took advantage of this because it gave the US access to very cheap capital (borrowing) which allowed deficit spending, and it also gave the US enormous leverage over pretty much every other country in the world financially. For instance, the sanctions against Iran, North Korea, and Russia are based on the fact that the global system of trade is mostly based on the US dollar.
The US dollar is falling because even though Americans are still buying lots of stuff from overseas, there's a notable concern about the stability of the US as both a safe place to invest, and as a good investment return. Now I personally think there's still a potential for high return on investment if I were to invest in the US, but I do also have concerns about any money I have in US investments because you just don't know if the US government would do something drastic like confiscate foreign investment, etc. I don't consider it likely, but it's not something I would have worried about 10 years ago, but it's at least a remote possibility now.
I think the goal of the US is to bring more manufacturing back onshore. I think this is a reasonable goal. There are always winners and losers in any change. Bringing back manufacturing jobs tends to help the working class, as does limiting the supply of cheap labor by deporting lots of people. Note that while this is probably a net benefit to the working class, corporations won't like it. They prefer a strong US dollar which makes borrowing cheap and they prefer low wages too, so they're generally pro-immigration. But that's the story of the last few years... the working class has now gained political influence, not just in the US but across the western world, and the right-wing political parties have embraced them, which is a bit surprising because the right-wing parties have traditionally been the party of big business.
Big business now finds itself politically homeless, or certainly far less influential than they used to be. I suspect they're just hoping to ride this out. I'm not convinced this is a temporary situation. I believe that Trump has proven that the working class is now in play politically, and both parties will bend themselves towards catering to their interests. We even saw this in Canada with the liberal party running a guy who's very moderate, perhaps even right-of-center in some ways, and reduced immigration significantly even before the election earlier this year. I think this is just the ne
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tl;dr
The emperor's new clothes look great!
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"I think the goal of the US is to bring more manufacturing back onshore." Bullshit. The only reason la Presidenta decided to declare economic war on the rest of the world (except for lovely Putin and Israel) is because then he could act like a "dealmaker" fixing the problems he caused. Only the Maggots are stupid enough to believe it is about bringing manufacturing onshore.
The easy tell is that if they managed to do that, they would not have the people to staff that manufacturing now that la Presidenta is e
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Short of union based industries like steel or automotive there are no good paying factory jobs. What factory is going to pay a person to turn bolts all day and support a family and mortgage? The 1950s aren't returning.
Trump Destroying Dollar's Global Sentiment (Score:3)
To be clear, this is the goal of Project 2025. Implicit in their trade objectives is bring to an end to the unique position of the dollar in world finance. The Heritage Foundation and Rupert Murdoch believes that we will be better off if the dollar is one of the world's reserve currencies and not THE world's reserve currency. They believe this will bring back 1950's industrial power to the U.S. -- but the tradeoff they are making for us is that everything we import could cost as much as 3X more than it did before they destroyed the value of the dollar.
The value of the dollar is not only declining, but the interest on Treasuries is rising. As the value of the dollar declines, the fraction of the U.S. budget that goes to interest payments is simultaneously rising. Americans are all going to be significantly poorer in terms of the real purchasing power of our wages and responsible for ever increasing debt payments via our taxes. Americans will have to put more into the government to get less from it.
This is going to be Trump's legacy and he will be compared in future history books to Rome's Emperor Honorius and Greece's Alexander the Great (Who though briefly immensely expanding the Greek Empire also is the reason it totally collapsed)
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Before or after you add on the tariffs? Don't forget those are on the sticker price and paid in USD, so if something costs you 3x as many dollars then you'll also need to pay 3x as much in tariffs on top as well (assuming the tariff rate doesn't change again, of course). Even at Trump's base tariff rate of 10%, that would mean something that would
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America is an empire (Score:2, Insightful)
We use our national debt to artificially prop up the value of the dollar. We then use the high value of the dollar to import trillions of dollars in products for a fraction of their actual value increasing your quality of life. That giant SUV you bought? That's why you can afford it.
Donald Trump and the Republican party are breaking down all the systems that made that possible. As a direct result of this your quality of life is
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Fall of an empire (Score:2)
That is what it looks like in the earlier stages. Enjoy the show, it does not happen very often.
The Russian Got Their Money's Worth from Trump (Score:2)
Best year (Score:2)
Debt is worth less, export worth more dollars, import heavily burdened. Only advantages.
Trump delivers! (Score:2)
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Re: "Worst" is a judgement call (Score:2)
Remember when your attitude was prevalent in the 1980s but the US stock market is still insanely profitable?
Re:"Worst" is a judgement call (Score:4, Interesting)
You're right. But considering global trade and public perception, having a "weaker" currency nowadays directly means more expensive stuff.
I live in a country with a heavily devalued currency and while a good part of national industries greatly benefited of it by expanding its exports (which leads to a positive trade balance for the country), it isn't well seen by the majority of the population that end up having much less access to several products.
Also, the most benefitted industries are the primary ones (commodities), which have a lower demand for technology and less aggregated value. Industries that need to import machines, supplies and services get depressed and outdated by increasing, almost prohibitive costs.
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Just bring dollars! XD
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No, it isn't a judgement call. The summary and article are very clear: they are talking about the exchange rates USD vs the other major currencies. They are clearly postulating, and providing evidence for, a decline in purchasing power of the USD aginst the others. It isn't up to interpretation; it isn't up to your opinion; you don't get a say. It is hard, cold, truth.
Funny how that stings, isn't it.
Re: "Worst" is a judgement call (Score:2)
What if you buy US stocks with your dollars, and they go up more than the dollar declines?
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No, it isn't a judgement call. The summary and article are very clear: they are talking about the exchange rates USD vs the other major currencies. They are clearly postulating, and providing evidence for, a decline in purchasing power of the USD aginst the others.
I'm not disputing that exchange rates are changing. I'm saying that exchange rates of one level or another are not per se good or bad. It just is. A "weaker" dollar means there's less demand for dollars relative to other currencies and imports are more expensive relative to domestically produce products and services. Is that good or bad? I don't know, I'm not sure it really matters.
Now what might matter is why there's less demand for dollars than there used to be. If it's because the federal government has